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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Victor Lazlo who wrote (150429)	12/1/2002 9:53:33 PM
From: H James Morris	Read Replies (3) \| Respond to of 164684

Amazon could be an interesting short after Xmas. Put in max pain @ 26. What's the risk? <<Internet stocks are the rage again on Wall Street, led by one of the most hotly debated, Amazon.com. The company's stock price has more than doubled this year to around $24, caught up in a recent tech-stock boomlet. The Web retailer now sports a bubble-like valuation of 170 times projected 2002 "pro-forma" profit of 14 cents a share and 100 times 2003 pro-forma estimates of 24 cents a share. It's notable that these estimates are based on Amazon's preferred calculation of profits, which excludes ongoing restructuring charges and stock-based compensation. When these expenses are factored in, the company still is losing money. Amazon bears, including Mark Rowen of Prudential Securities, say Amazon's stock could fall to $10 in the next year because of its high valuation. Amazon has a profitable domestic books, music and video business, but loses a bundle in its e-tailing division focused on electronics, tools and kitchen equipment, while breaking even in international operations. The shares have been boosted lately by encouraging comments about the Christmas season from Amazon Chief Executive Jeff Bezos. In a bid to boost sales, Amazon is offering free standard shipping on orders of $25 or more. Critics call this a sign of weakness, not strength. Amazon, meanwhile, is burdened with more than $2 billion of debt. The company's market value of $9 billion is more than the combined market values of Barnes & Noble and Borders; their shares are much more reasonably priced. Amazon may have defied the critics who predicted its demise. But it's hard to justify Wall Street's current enthusiasm for the shares. sunday.wsj.com